Monday, February 5, 2018

The Feds Put Wells Fargo In The Penalty Box

I believe most investors expected that there would be meaningful consequences for the long list of consumer banking misdeeds Wells Fargo (WFC) has racked up in recent years. After all, widespread, highly public fraud is not something that regulatory bodies can really just ignore if they want to maintain any semblance of credibility with that same public. In any case, the punishment handed down by the Fed on Friday 2 was unusual and significant.

Wells Fargo will survive the Fed's move, and the impact to earnings in 2018 and 2019 is most likely not going to be all that severe. True, it does sap the bank's earning power just as it seemed to be ramping up again, and it does carry ongoing reputational risk for the bank, but it is not a crushing (let alone killing) blow by any stretch.

Read more here:
The Feds Put Wells Fargo In The Penalty Box

No comments: